Last week we updated you on what we’re doing to combat the effects of the COVID-19 (the coronavirus) pandemic on our investors’ portfolios. We took immediate, proactive and temporary action and will continue to do so on an ongoing basis while we navigate the rapidly changing environment.
As an update on execution against our 3 strategies:
We have taken fast and aggressive action. We reduced approval rates for certain higher-risk borrower populations, increased income and employment verification requirements, and adjusted our marketing mix (focusing on channels where we have the most flexibility to control volume and credit quality). We will continue to make additional changes as necessary.
Based on increased call volume and anticipated need, we have been working hard to rapidly add new collections and servicing capabilities, ranging from remote-work kits for our customer service teams to adding new hardship plans. (Hardship plans are payment plans that provide us with flexibility to address borrower needs during periods of financial stress. For example, our standard plan enables borrowers to make interest-only payments for a few months while they experience a hardship. We designed a plan specifically for this situation, and launched a new skip-a-pay feature which allows borrowers in need to skip up to two payments.) Week over week, we will have tripled our capacity to take payment calls (from March 16 to March 27), and we will soon launch the ability to recruit and train agents virtually.
We’re committed to our members’ financial success and will do everything we can to help them stay on track.
As expected, last week we began to see an increase in the number of inbound calls from borrowers calling to tell us that they are impacted by coronavirus. To date, the number of borrowers requesting access to hardship plans has been relatively small (less than 1% of total loans outstanding). A high percentage of those calling in are in current status and approximately 17% of borrowers who have requested hardship plans are self-employed or contractors.
We are tracking expansive data sets daily, and will continue to make adjustments as the situation evolves. Given the uncertainty of the impact of the coronavirus on our members, we are withdrawing our performance targets announced in our Q4 2019 Quarterly Platform Update. We will continue to evaluate the impact on investor returns and will share more insight with our investors once available.
We’re here to help our community through the pandemic and are encouraged by how many of our investors have reached out to see how they can help. In partnership with our investors and borrowers, we can get through together.
From an enterprise perspective, LendingClub remains ready to help—we have a strong cash position and the flexibility to adjust in this dynamic environment.
We will continue to keep our investors posted and encourage them to reach out to us at email@example.com with any questions.
Over the past several weeks we’ve updated our platform investors on what we’ve done and what we’re continuing to…READ MORE
Like many others, we are closely monitoring the public health and economic impact of the coronavirus pandemic. To date…READ MORE